Real estate is a hot topic, and the questions about it keep coming. Sometimes the answers are pretty straightforward, while others are a bit more complex. But there’s one thing for sure: The answers are out there!
By analyzing Google Trends data collected using this keyword tool, we identified some of the nation's most pressing concerns and inquiries about the housing market. Here are nine of the most Googled questions about real estate this year and our best answers to them.
Should I invest in real estate right now?
Answer: It depends. Real estate is an excellent investment, but it’s not for everyone. Though the average return on real estate is 10.6%, it takes time to see the gains. The housing market has also been particularly hard on buyers battling low inventory, record prices, and steeper competition. But recent shifts have signaled a cool down as rising home costs falter. Even as interest rates climb, securing a home loan now can lead to savings in the future. If the U.S. is indeed facing a recession, lending will tighten, making it far more difficult to get funds for housing transactions. If you’ve got a plan and credible research to back it up, now may be the best time to get into the market.
How can I make money in real estate?
Answer: There are several ways to tap into wealth using the real estate market. The most common way is through appreciation, an increase in the home’s value realized after selling it. Location, upgrades, and inflation are key in driving up property values. Owners can also earn an income through rent payments and land royalties. Real estate investment trusts (REITs) and groups (REIGs) are also great alternative ways to profit from the real estate sector.
Where are the hottest real estate markets?
Answer: Real estate experts commonly use the term “hot” to describe specific housing markets. Hot markets are areas experiencing rapid home value growth, positioning investors to receive maximum returns. These cities are also affordable, have a healthy job market, and include attractive local amenities. Austin, Nashville, Phoenix, Charlotte, and Atlanta are poised as some of the best investment locations due to economic stability and population growth.
Which housing markets are cooling off?
Answer: Markets can only remain hot for so long until they experience a cooling-off phase. Typically, markets begin neutralizing as buyers become more cautious with their home transactions. Experts describe cooling-off areas as cities with reduced home prices and decreased real estate demand. Though California metro areas are cooling off the fastest, other cities like Boise, Las Vegas, and Provo also face a housing chill.
Where are the most affordable housing markets?
Answer: As rising mortgage rates chip away at buyers’ purchasing power, more people wonder where to get the most house for their buck. Affordability is partly calculated by the percentage of homes sold to families earning the national median income. For example, 42.8% of homes were sold to families making the U.S. median income of $90,000. The percentage increases as homes become more affordable. Likewise, monthly payments that are more than 25% of the total household income are deemed unaffordable. States with the most affordable housing markets include West Virginia, Ohio, Oklahoma, Indiana, and Michigan.
Why do homes cost so much now?
Answer: Housing prices have soared and continue to climb for several reasons. While inflation is prevalent, many experts blame low inventory as sellers pull out of the market due to growing uncertainty. An increase in demand also almost always leads to higher home prices. Rising construction costs and land prices also play a role.
What would a recession mean for real estate?
Answer: Inflation is rising, but the National Bureau of Economic Research (NBER) has yet to formally label the current economic trends as a recession. This is because everything isn’t as bad as it seems. Though the dollar is weakening, the job market remains strong and steady. But an impending recession isn’t totally out of the question. In fact, several analysts believe there’s one right around the corner, and it will affect the housing market. Recession can cause home prices to increase and construction to stall as mortgage rates climb. In the short term, higher interest rates may slow down home purchases, but real estate should be considered a long-term investment. So, while there may be a short turn down in real estate during a recession, the market will correct itself over time.
Is buying a home tax deductible?
Answer: While the actual purchase of a home isn’t technically deductible, there are several tax breaks available to homeowners regarding home transactions. Homeowners can take advantage of itemized mortgage interest deductions or deduct up to $10,000 of property taxes. Home improvements necessary for functionality, like widening hallways for accessibility, are also tax deductible. Home office expenses are another tax break that has become increasingly useful as more people switch to remote work.
Are real estate agents in demand?
Answer: Market volatility has led to bidding wars, price hikes, and dwindling inventory. As more people become interested in real estate, the need for an agent becomes apparent. Real estate agent skills are evolving just as quickly as the market is heating up, and having an experienced realtor can get you to closing day sooner with fewer hiccups. According to the National Association of Realtors, 86% of buyers bought their property through an agent or broker, while 86% of sellers used the help of an agent to close. Even more, homes sold using an agent typically sell at a higher price than for sale by owner (FSBO) properties. It’s safe to say that agents' expertise is still in high demand.
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We know real estate is constantly changing and evolving, and we want to be there with you every step of the way. Our goal is to help you find the answers you need, whether it's about how to choose the right agent or where to find the best deals on properties.
Whether you’re buying a home in Santa Fe or selling your current residence, the Ricky Allen, Cathy Griffith, and Tara Earley Team is here to help! We have a wide variety of homes for sale in Santa Fe, and we can help you find the perfect one for your needs. If you want to learn more about our services, contact us today!
